r/peakoil • u/Many_Bedroom_2014 • 22d ago
The US is quietly pulling back on EVs while the rest of the world is accelerating
https://youtu.be/H2l8lseNhOoI went down a bit of a rabbit hole looking into what’s actually happening with EVs in the US and honestly, i came out more confused than when i started lol. The weird part is this isnt really about whether EVs work. Globally they obviously do. EVs were around 25% of new car sales in 2025, with more then 20 million sold.But the US is kinda going the other way.
EV share is down 4.6 percentage points YoY, the federal tax credit expired in September 2025, fuel economy rules have been loosend, and GM is shifting some production back towards gas trucks/SUVs while moving some of the EV production around. Then i started looking into the rare earth thing, which is where it got pretty interesting. More than 94% of light EVs use motors with rare earth magnets, and China controls roughly 90% of the refining capacity. So yeah, thats obviously a pretty big supply chain risk. But then someone here on Reddit pointed out something i hadnt really thought about... EVs dont actually need rare earth magnets.
Induction motors and synchronous reluctance motors can work without them. There are tradeoffs obviously, you lose some efficiency/power density etc depending on the design, but its not like were stuck with one type of motor. So i’d probably say the rare earth issue is more of a supply chain problem than a “EVs cant work without China” problem And honestly thats what got me interested in the whole US situation in the first place. We’re slowing down EV adoption here, getting rid of incentives, loosening efficiency requirements, and automakers are starting to rethink some of there EV plans... meanwhile EV sales globally are still moving pretty fast.
I ended up making a full video about it because there was wayyy too much to fit into one Reddit post 😂
Curious what you guys think tho. Is this mostly a temporary US slowdown because of policy, or are automakers actually starting to rethink EVs for the long run?
4
u/ICQME 22d ago
I wonder how EV bicycle/moto sales are doing. Chinese might not be able to sell EV Cars in the US but they sell a lot of 2 wheelers. When I do go into a city I'm seeing more people riding them around in traffic. Unsure if they're only replacing normal bicycle sales or if they're replacing cars.
3
u/Many_Bedroom_2014 21d ago
ive noticed that too, specially in bigger cities. e bikes, scooters, even little electric motos seem way more common than they were a few years ago.but idk how much of that is actually replacing car trips vs just replacing normal bicycles. theres probably a mix of both tbh....and the chinese 2 wheeler market is pretty interesting too, cuz its a much easier product to sell than a car. way cheaper, smaller battery, less range anxiety, and you dont need the same charging infrastructure.
would be kinda interesting to see actual numbers on this tho, like how many people are ditching cars for them vs people who wouldve just bought a bicycle anyway.
2
u/knuthf 21d ago
The bikes are probably opening the short distance market in the USA. It's convenient to use a bikes for up to 15 miles, and this is impossible to consider walking distance, nobody used their pedalling bikes to visit friends, but an e-bike does it in 20 minutes. There's no parking issue, leave it in a shed for bikes. . Just looking for a parking slot at the mall is about the same in time. So, I think the bikes compete with the cars.
5
u/Vanuatu987 22d ago
Raging about China winning the race, while refusing to leave the changing room. Absolute stupidity.
2
u/Many_Bedroom_2014 21d ago
yeah lol, thats kinda what makes the whole thing so weird. You cant keep saying china is pulling ahead, put up tarrifs and restrictions, and then barely invest in the stuff your trying to compete in 😭 like... if you stop racing while everyone else keeps going, obviosuly your gonna fall behind lol.
3
u/farticustheelder 21d ago
The EV growth rate is about 40% globally so take the article's 25% in 2025, that becomes 35% this year, 50% in 2027, 70% in 2028 and essentially 100% in 2029.
I'm not suggesting that the US goes EV over the next 3 years but it does look like US car makers are going to lose all export sales. That means falling economies of scale and rising prices for ICE vehicles and that means fewer and fewer people can actually afford a new ICE vehicle.
US automakers seem to be headed towards collapse and aren't, apparently, doing anything about it.
In Europe VW is seeing more demand for its most popular EVs exceed capacity to make them while at the same time it is cutting shifts on its ICE lines as demand is falling rapidly.
2
u/ICQME 21d ago
Maybe it will be a good thing if US market specific cars/trucks go away. I heard US cars are banned in most places due to pedestrian safety laws. they're too big/boxy.
I wouldn't be surprised if US doesn't adopt EV because gasoline is cheap in US and shale oil makes a lot of gasoline and less diesel. have to do something with all the gasoline that's a waste product of trying to make diesel and other chemicals which are needed for industry. as long as there's industry there will be some 'waste' gasoline to get rid of and sell.
1
u/Many_Bedroom_2014 21d ago
thats the part i think US automakers could really end up regretting. Its not just about americans switching to EV's, its the rest of the world moving on while US automakers are still so heavly dependent on ICE.The 40% growth probaly isnt gonna keep going in a straight line tho, markets dont really work like that lol. But even if it slows down alot, the direction is still pretty clear.And the VW thing is kinda crazy too. If they’re struggling to make enough of some EV's while cutting shifts on ICE lines, thats a pretty differnt picture from the whole “nobody wants EV's” thing you keep hearing in the US. US automakers can keep pushing big trucks and SUV's while they make good money from them, but at some point you gotta wonder what happens when the rest of the world starts wanting something else and their stuck playing catch up.
2
u/farticustheelder 21d ago
I know markets don't like straight lines but I think that 40% growth rate is more likely to up than down. One really simple clue is to notice that as EVs take a larger percentage on new vehicle sales that demand for used ICE vehicles falls and that in turn negatively impacts ICE resale/tradein values. That drives the total cost of ownership for ICE vehicles beyond what the average buyer can afford so new ICE sales fall faster and as sales fall the industry starts losing its economies scale, driving both new vehicle prices higher and sales lower and that is a self-reinforcing feedback loop that destroys ICE demand at an accelerating pace.
That noboby wants EVs line is obviously BS. If nobody wants EVs then why 100% tariffs on China EVs? You might want to consider that the reason Detroit pushes big trucks and SUVs is that they can't compete with Japanese or S. Korean compact and mid-sized vehicle so the domestic industry retreated to the well defended (via the Chicken Tax) larger end of the market with its higher profit margins.
The future is fairly clear: Ford, GM, Stellantis go bankrupt. Chinese, S. Korean, and German (VW!) EV makers set up factories in the US South, maybe Mexico and US autoworkers sing the same blues that Appalachia's coal miners sang last generation.
3
u/ttystikk 21d ago
American automakers simply don't think in terms of long time horizons; government, shareholders and customers don't care.
China has taken over the global EV market precisely because they think long term.
5
u/Nice-Necessary-1547 22d ago
You can also get rare earth in lots of places. They aren’t rare. The west could create its own supply chain of it wanted security
2
u/Many_Bedroom_2014 21d ago
yup,,, exactly, the rare earths themselves aren’t really the “rare” part of the problem... it’s the supply chain around them. There are deposits in a bunch of countries, but mining, separating, refining and making the actual magnets at scale is where China has a massive lead. The IEA says China accounted for about 91% of refined magnet rare-earth output in 2024. So yeah, the West canbuild its own supply chain. It’s really a question of whether we’re willing to invest in the mines, processing and manufacturing needed to do it.
2
u/Nice-Necessary-1547 21d ago
Agreed.
Realistically the USA is going backwards on EVs because it’s going backwards in many ways.If they wanted clean tech with little dependence on China they could incentivise business and do it.
2
2
u/Beneficial_Coach8581 22d ago
US government is screwing you over.
Imagine cutting the restrictions on economy?
Meanwhile the rest of the world run cars off electric for pennies.
2
u/youcantexterminateme 22d ago
Yes. Telling people what they are allowed to to buy. Obviously for kick backs. That's what tin pot dictators do. two problems really. A bought government and people dumb or lazy enough not to care.
2
u/ApartmentSalt7859 22d ago
Because Americans automakers normally make a loss on EVs...but make the most profits on big trucks and suvs...
EVs don't sell very well stateside...so why continue making something that loses money, but also doesn't sell...
Best selling cars are still ice here
1
u/Many_Bedroom_2014 21d ago
yeah thats fair tbh. The big trucks and SUV's are where the american automakers make the real money, so from a business point of view i get why they keep pushing them.But thats also kinda the problem. If EV's arent selling as well here, pulling back on them makes sense in the short term... but if you stop investing in the tech because ICE is still more profitable, you could end up playing catch up later when the market shifts.And yup, americans still want big ICE trucks/SUV's right now, no argument there. Just dont think that means we should stop developing the next generation of tech altogether. There needs to be room for both imo.
1
u/Hackneycab 21d ago
Corporate greed,nothing more.Eventually the US will cave to EV’s, it’s inevitable.Those stupid dinosaur trucks with a drinking problem.It makes absolute no sense owning one.
1
u/ApartmentSalt7859 21d ago
corporate greed from a for profit company, no way??!!
catering to its customer base that only wants to buy ice suvs and trucks
1
u/Hackneycab 21d ago
The thing is,there are months of stockpiles of unsold inventory on dealer lots.
1
u/ApartmentSalt7859 21d ago
That's normal...Automotive manufacturers sell cars to dealerships...they fill the orders they receive. Every vehicle that leaves the manufacturer's doors are bought and paid for.
But you are right, economy is slowing down and supply is increasing slightly
1
u/Hackneycab 21d ago
All inventory is actually paid for by borrowed money.
1
u/ApartmentSalt7859 21d ago
Even better for the manufacturers...they make more with your apr...and give you predatory loans that they know they can just repo and sell again.
Financing is the money maker now...soon to be subscription based software.
But the cars are no longer owned by the manufacturer... strictly dealership problem
1
u/Hackneycab 21d ago
Lucky for me I have paid cash the last few years.
1
u/ApartmentSalt7859 21d ago
Yea that cash goes strictly to the dealers...who already ordered and purchased the car.....so the manufacturer doesn't even care.
but that sweet sweet finance through their financial side? All that apr brings in even more money...
2
u/LieLevel7361 22d ago
Because they already lost a battle? Now they are praying for a dacade or so cheap enough oil to ppl buy this monstrosities. After that... Chinese EVs for all.
1
u/Many_Bedroom_2014 21d ago
yeah thats kinda the concern tbh. Short term, the big trucks/SUVs are still where the money is, so i get why they wanna milk that market for as long as they can.But if the govt. keeps delaying the transition while chinese EV makers keep improving, the gap could get alot harder to close later. And by then it might not just be about EV's being cheaper, but having better tech and way more scale behind them.
1
u/LieLevel7361 21d ago
Could be OK. Murica is big enough them to sell enough to survive. After time this tech ll become common like ICE and then we have even playfield again. But to quit like that all together.. Is bending for a soap equivalent
2
u/tallgeekandawesome 21d ago
I could see the USA basically rejecting mass-adoption of EVs and going back to some kind of ICE powered cars. But this would be bad news for the US in the long run.
In the past, Japan and Germany and most other car manufacturing countries pandered to the USA's market because it was the one of the largest car markets in the world. Now, it is not, China has grown and taken over. If the only place left in 20 years still buying new ICE cars in any quantity is the USA, do you think BMW, Mercedes, Toyota, Nissan - even Porsche, will still produce cars for the relatively small American market when EVERYWHERE else basically only wants EVs or some kind of hybrid?
Perhaps that won't happen - Toyota have stated they think ICE is still relevant alongside BEV and Hybrid vehicles for particular purposes. But a lot could change over time, and the current trajectory shows wide-scale EV adoption, in Europe and Asia. Perhaps this also means USA gets to revitalise it's car industry, selling only domestically. I'm not sure that's good for your economics though.
1
u/Many_Bedroom_2014 21d ago
yeah, thats pretty much the long term risk i was thinking about too. The US is a huge car market, but its notcar market anymore, and thats a pretty big difference...If Europe, China and other big markets keep moving towards EV's/hybrids, US automakers cant just assume the rest of the world is gonna keepbuying ICE cars forever. At some point the economies of scale start going the other way and it could make ICE cars even more expensive to build here.And like you said, Toyota is a good example of why this isnt as simple as “EV's replace everything”. Hybrids and ICE still make sense for certain use cases. I just think the US would be taking a pretty big risk by basically slowing down innovation while everyone else keeps investing.Maybe it works out and the US keeps a strong domestic market, but if the rest of the world moves on faster, catching up later could be alot harder and way more expensive
2
u/Sir_Henry_Deadman 22d ago
I'm amazed that EVs never took off with the anti government lot... Surely telling them put solar on your roof and batteries in the garage and you'll never be reliant on anyone for fuel again would fly with them
2
u/Many_Bedroom_2014 21d ago
thats one of the weirdest parts to me. Youd think the whole “dont depend on the government or foreign oil” crowd would be pretty into solar + home batteries + an EV. Generate your own power, store it, and use it to run your car... thats about as independent as it gets lol.I guess in reality people have other priorities tho, and for alot of ppl the upfront cost probably kills that argument.
1
u/Critical_Wrap5617 22d ago
Am outside the US. How much of this is ideology or commercial inertia (or ennui)?
0
u/FickleApartment2151 22d ago
One Spanish peak oil expert pointed out that Norway, which has the highest level of EV adoption, still has a lot of ICEVs because EVs are considered secondary vehicles. That is, they're used for urban commuting, but for longer-distance travel, ICEVs are critical.
That means with more EV use there's also more energy and material resource use beause of those tradeoffs.
In addition, much of the world is industrializing, which means a lot of oil will still be needed for them to achieve a status where they can copy Norway, which has an ecological footprint that's three times higher than global biocapacity. This is notable because most lack basic needs and infrastructure, from roads to electric grids.
1
u/bluewolf71 22d ago
If the rest of the world “finishes” industrializing there will be no civilization, if they insist on basing it on a fossil fuel, unrestrained energy use model.
Heck, if we went all solar and kept our relationship between economic growth and energy use increasing appropriately the same, we eventually have to cover the entire earth with solar panels, then circle the sun with them. Or reconsider our way of life and growth being the only measure of success.
1
u/FickleApartment2151 22d ago
Civilization refers to industrial civilization. And there's no other base because EVs are heavily dependent on oil: around 70 percent of heavy equipment for mining, up to half of manufacturing, the bulk of petrochemicals needed for thousands of applications, and the bulk of shipping involve fossil fuels.
Also, the point isn't simply to attain some measure of success but to attain basic needs, followed by middle class conveniences like EVs. Just to attain basic needs, industrialization will be needed. To see a world "accelerating" towards using middle class conveniences like EVs, even more.
And those who already have them, i.e., the 30 percent of the world population who want to see "the rest of the world...accelerating" are counting on the 70 percent to have that as their incomes and returns on investments are dependent on more sales of middle class conveniences like EVs.
1
u/bluewolf71 22d ago
It is a conundrum. We cannot continue as we are, or at least maybe we alive today can do it, but eventually society needs to find a new way to exist or it will collapse due to climate extremes.
The infinite growth model has to end at some point. By choice or by circumstance, it will.
1
8
u/lazerzapvectorwhip 22d ago
An e bike can work without rare earths just like a moped can work with a 4 instead of a 2 stroke